Where to Get Money for Your Land Acquisitions (CFFL 507)
Transcript:
Jack Butala: Jack Butala with Jill DeWit.
Jill DeWit: Hi.
Jack Butala: Welcome to our show today. In this episode, Jill and I talk about where to get money for your land acquisitions. This is very popular topic these days. We've decided to address it online.
Jill DeWit: Love it.
Jack Butala: Before we get into it though, let's take a question. Posted by one of our members on the LandInvestors.com online community. It's free.
Jill DeWit: Okay. So this is really good. This is from one of our members that have been with us for a while and I just love this. The ti ... He put it in Land Investors, and the title of the post is, "Town of 200, Land is basically free if you can find it." I love this.
Jack Butala: Well aren't ... This is fantastic.
Jill DeWit: Isn't this great. He has a photo by the way, so as I describe this, you can imagine the photo that he posted with this.
Jack Butala: What does it look like?
Jill DeWit: It looks ... It's a ... You'll ... Let me read it here and you'll get it.
Jack Butala: Okay.
Jill DeWit: "Got a deal for a couple hundred properties scattered all over the place. Looking them up to see this collector likes these little towns. The one in the picture is an example. One handicap parking spot, and one regular parking spot at the post office."
Jack Butala: So he must've gone there.
Jill DeWit: I bet parking is never a problem there. There's two parking spots over by the post office and there are no cars. That's the image that you see. It's so cool. "The town is population of 202."
Jack Butala: These people are salivating listening to this right now. They're dying to get out of a big city.
Jill DeWit: Not 2,000, 200,000. No, it's 202 people. That's it. I'm sure they'd change it often. "The town, the lot is in the town, but I can't tell exactly where. I probably have to order a map from the county on each one of these eclectic properties. It'll be interesting to see how long it takes to sell them, for how much."
Jack Butala: That's a big word for you.
Jill DeWit: Right? Yeah.
"Pricing them is like throwing darts blindfolded. I think I will do some kind of formula. What do you guys use in your formula to price them so you don't have to research each property? I just don't have the time." That's Luke's comment. I'm thinking some kind of conveyor belt approach that starts with high prices and lowers over time to find the market.
Jack Butala: That's it.
Jill DeWit: That's a good plan, so.
Jack Butala: Good answer. Good first answer. So here's the thing. We teach ... When you're new at this, there's a formula, right? You go out on a land watch and you start with what properties ... This is how you price property, if you're new. You go on a land watch inlay environment, you see what's being sold. What's been on the market for not a lot of time, and it's getting offers, or it's getting purchased, and then you work backwards from there on your acquisition price.
We usually say in the beginning, you should price it at about 40% for a rural, vacant land. For houses, it's way different. For other assets, people write dissertations on how to price real estate. For this asset site, this seems to work for our members and it's been working for us, for a real long time. However, once in a while you find property like Luke's got here,